Is General Dynamics' Massive New Stealth Destroyer the Ship of the Future?

An artist rendering of the Zumwalt-class destroyer DDG 1000, a new class of multi-mission U.S. Navy surface combatant ship designed to operate as part of a joint maritime fleet, assisting Marine strike forces ashore as well as performing littoral, air, and sub-surface warfare. Photo: U.S. Navy. 

"Massive" doesn't exactly conjure images of stealth, but the DDG-1000 Zumwalt, the biggest U.S. Navy destroyer ever built, is stealthy. Further, it has advanced features such as a gun that fires rocket-propelled warheads as far as 100 miles, and an "unusual" wave-piercing hull.

Even more impressive? Bath Iron Works, a subsidiary of General Dynamics , is on time, and on budget, when it comes to construction of the Zumwalt -- a major accomplishment in the defense-contracting world. Here's what else you need to know. 

Bath , Maine (Dec. 14, 2012): The 1,000-ton deckhouse of the future destroyer USS Zumwalt (DDG 1000) is craned toward the deck of the ship to be integrated with the ship's hull at General Dynamics' Bath Iron Works. Photo: U.S. Navy.

The Zumwalt
With a price tag of $3.5 billion, the Zumwalt is one of America's most expensive warships; it's also one of the most advanced. It's 100 feet longer than the next largest destroyer, but it can be crewed with just 158 sailors -- nearly half of what it takes to crew current destroyers.

The Zumwalt also rides low in the water -- thanks, in part, to its antenna-laden superstructure, making it stealthier than other warships. Plus, it has a power plant that can produce 78 megawatts of electricity, meaning it could be used for futuristic weapons like the electromagnetic rail gun, which can fire projectiles at seven times the speed of sound. Loren Thompson, defense analyst at the Lexington Institute, said, "It's not so much a radical concept as it is an attempt to pull off a full range of missions with a ship that has one foot in the present and one foot in the future." 

More importantly, having the Zumwalt come in on time and on budget is something the Navy desperately needs, especially because both LockheedMartin's "cheaper" Littoral Combat Ship, or LCS, and Huntington Ingalls Industries' CVN-78 Gerald R. Ford, have had costly overruns, mechanical issues, and delays. Norman Polmar, a naval historian, analyst, and author, went so far as to say that LCS "is a total disaster."  

The future of the DDG-1000
Originally, the Navy had envisioned buying 20 new destroyers. However, because of the high price associated with the necessary sophisticated features, Navy officials reduced the number of ships to three. However, it's no secret that the Navy is in dire need of new ships, and Bath Iron Works just demonstrated that it's capable of building next-gen ships on time and on budget. While that doesn't guarantee the Navy will order more DDG-1000 destroyers, it does put it in a very good light.

More pointedly, according to a Congressional Research Service report from Oct. 22, the Navy has looked at procuring "a version of the DDG-1000 destroyer that is equipped with the AMDR [air and missile defense radar] and capable of BMD [ballistic missile defense] operations." Further, "A new estimate of the cost to develop and procure an AMDR-equipped, BMD-capable version of the DDG-1000 might differ from the estimate in the Navy's 2009 destroyer hull/radar study (the study that led to the Navy's decision to stop DDG-1000 procurement and resume DDG-51 procurement) due to the availability of updated cost information for building the current DDG-1000 design." 

The cost assessment is no doubt helped by the fact that the Zumwalt has been so successful at not going over budget, or incurring setbacks.

The ship of the future?
The Zumwalt is a marvel of engineering and precision, and the Navy needs that right now. Further, Bath Iron Works was able to construct the Zumwalt without going over budget, or incurring substantial delays. That can't be overstated when it comes to defense contracting. Consequently, Bath Iron Works looks to be in a great position to receive future orders -- and that's great news for defense investors.

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Fool contributor Katie Spence has no position in any stocks mentioned. Follow her on Twitter: @TMFKSpence. Motley Fool owns shares of General Dynamics and Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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